US plastics compounder and distributor A. Schulman (Akron, Ohio; www.aschulman.com) issued a profit warning for fiscal 2016/2017 (ending 31 August), as it faced margin compression in Europe and weakened operating results in some other regions. It now forecasts adjusted EBITDA at USD 200 - 204m compared with its previous goal of USD 225 - 230m. Adjusted net income is now expected to be 23% less and in the range of USD 1.60 - 1.70 per diluted share, down from USD 2.08 - 2.18 per diluted share.

CEO Joseph M. Gingo said that while volumes in Europe were in line with expectations, the scale and timing of raw material cost increases was putting “significant” pressure on profit margins. The company is experiencing a lag in its ability to recover the raw material costs, he added. Margin recovery is forecast to gain traction towards the beginning of fiscal 2018.

In the third quarter (31 May), EMEA regional sales were USD 318m, 1.3% lower than in the same quarter for the previous year, while gross profit fell by USD 7.3m, or 14.7%, to USD 42.5m. After nine months, cumulative regional sales dropped 5.3% year-on-year at USD 941m, while gross profit was down 7.5% at USD 126m.